A bank following a(n)_________________________ liquidity management strategy must take care that assets with the least profit potential are sold first.
A)asset conversion
B)liability management
C)availability
D)funds source
E)None of the options is correct

Question

Quizplus · Accepted Answer

An asset conversion liquidity management strategy involves transforming illiquid assets into cash or highly liquid assets. This strategy prioritizes selling off assets with the least profit potential first, which makes choice A the correct answer. Liability management strategies focus on managing the bank's liabilities and funding sources, while availability strategies ensure the availability of cash or highly liquid assets to meet immediate needs. Funds source strategies are concerned with managing the sources of funds used to finance the bank's assets.

A Bank Following A(n)_________________________ Liquidity Management Strategy Must Take Care